Last week, data released were mixed.
Conference Board Consumer Index exceeded expectations, reaching 103.3 in August (vs consensus 100.7).
While labor market conditions worsened as July’s labor market differential revised down to 17.1% and further declining to 16.4% in August, jobless claims remained steady, indicating no sudden worsening in job market conditions.
Additionally, US real GDP growth for the second quarter was adjusted upwards by 0.2 percentage points to 3%, due to a significant revision in real PCE to 2.9% from 2.3%, influenced by both goods and services expenditure.
Looking forward, markets predict core PCE deflator for July will increase 0.2% m/m, which will boost Fed’s confidence that inflation is falling.
Additionally, markets are also anticipating a 0.3% m/m increase in real consumer spending in July (vs 0.2% prior). Recent consumption is supported by dis-saving, and saving rate is anticipated to decline further in July.
According to Bloomberg, it is noted that ~80% of households have used up excess savings accumulated during the Covid pandemic, meaning that there is a chance that households lack resilience to deal with negative shocks and consumption could slow if unemployment climbs as it has the past 4 months and if stock market rally loses momentum.
We expect CSOPUMM to continue to deliver stable yield in the near term. As of 20240830, the fund has gross yield of 5.47% and net yield at 5.17%. ^
Source: CSOP, BEA, Bloomberg, as of 20240830. ^ Gross yield is based on annualized yield of underlying holdings. 7-day net yield is calculated based on calendar days and NAVs in 5-decimal.
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